Not So Risky Business: Mitigating Risk Through ESG Investing

There is little that investors can do to anticipate unexpected macroeconomic risks such as the coronavirus that rattled markets in the first quarter of 2020. Such events are jarring, and while they often receive the most attention, they are far from the only hazards investors must negotiate on the road to financial success. Mounting evidence suggests that stock-specific risks related to company controversies are also quite damaging to portfolio returns. Thankfully, in this arena, investors do have a potent weapon to defend themselves from losses: Environmental, Social, and Governance (ESG) data.